It was a tale of two economies this week as both the UK and Scottish Government published the next series of papers on Scottish independence, this time focused on finance.
There was little surprise at the position each of the papers took. For the HM Treasury, the implications of independence would be an over reliance on the financial sector, which in turn would increase borrowing rates and leave Scotland unable to respond to any future banking crises. The paper also argued that Scotland would also face an expensive and challenging task to provide consumer protection comparable to the UK.
The Scottish Government argued that the paper was not an accurate reflection of the financial services market, and that the Treasury lacked credibility in its findings.
In response, the First Minister and Deputy First Minister published a report on Scotland’s economic strengths, and the times when it argued the UK Government had hampered progress. The paper highlighted key policy levers that an independent Scotland could use to tackle income inequalities, create employment, counterbalance the economy away from London and stimulate growth in key sectors and the economy.
More aspirational in nature than the Treasury paper, the media response was relatively muted, with some editorials calling for further detail. It remains to be seen whether either paper has much impact on polling numbers.
In Parliament there were debates on Scotland as a science nation, transport and the Forth Road Bridge. The Culture Secretary, Fiona Hyslop announced that there were plans for a film studio to be set up in Scotland. This move was prompted by the recent introduction of tax breaks for the creative industry. Several Hollywood blockbusters have recent film in Scotland, including The Dark Knight Rises, World War Z and Cloud Atlas.
Next week will see debates on homelessness, chronic pain and the future of the country’s railways.
If you have opened a paper this week you’d have seen that the UK government published its Treasury paper looking at Scotland’s economy. This was promptly followed on Tuesday by the Scottish government’s own take on the matter. Not surprisingly there were a few irregularities between the two. What was surprising was that it took the chamber a whole 15 minutes in today’s debate to turn the discussion around to the Scottish economy. Scottish Conservative’s Ruth Davidson led the questioning, asking Salmond if he meant to confuse the Scottish people with his ‘wee booklet.’ The Conservative leader argued SNP’s plans for the economy would ‘turn Scotland into a Central American basket case’- a phrase protested loudly by the chamber. Salmond defended the Scottish Government’s plans- saying that it was taking the responsible route, and an independent Scotland would be taking on a responsible amount of the UK’s assets and liabilities. This week’s Denis Healey interview with Holyrood magazine was brought up twice by a delighted Salmond, who quoted the former Labour minister admitting the Westminster government had previously underestimated Scottish oil reserves in order to scare off support for independence. Healey himself seems to have had a change in opinion since the 1970s, now saying, ‘if the scots want independence then they should have it.’ Healey has in recent weeks caused problems for the his Labour party, joining the growing number of retired Westminster grandees questioning the UK’s continuing membership of the EU, and predicting that an Independent Scotland would be economically stable with their North sea oil assets. Healey’s comments adds fuel to the debate between the two sides of the campaign, with the Scottish Government predicting £57 billion in tax revenue from oil and gas, and Westminster dismissing any predictions of this boom as unsupported.
Scottish Labour avoided weighing in on the economic debate, opting instead to revisit last week’s topic of access to cancer drugs. Last week’s FMQs and huge amount of press attention centred on the case of cancer sufferer Maureen Flemming, who was forced to consider moving to England for treatment, resulted in both the First Minister and Alex Neil meeting with her this week and a treatment plan being agreed. Johann Lamont highlighted Flemming’s case once again, and others, who had only received the treatment needed once their plight had gained media and political attention. She said that assurance was now needed that decisions on cancer drug prescriptions were made on clinical grounds, not on the governments. ‘The NHS should be free at the point of need’ said the Labour leader ‘for most patients isn’t it true that it only becomes available at the point when it embarrasses the First Minister.’ Salmond said it was clear that Scotland should not be in a position where politicians are involved in deciding over which drugs should be used for patients. Both of the opposing leaders agreed the Scottish drugs system could be considered for improvements. The drug causing this controversy is the cancer drug cetuxima, one which original guidelines said was not appropriate for all patients.
Despite an optimistic start, with the chamber celebrating today’s release of improving Scottish economic statistics, the rest of the FMQs session was not a particularly enjoyable one for Salmond. Labour leader Johann Lamont was on fine form this afternoon demanding answers on the growing objections to the lack of access to life saving treatment in Scotland. Asking why it was that those in Scotland with a headache can get a free prescription of paracetamol, whereas cancer sufferers are paying £3,000 a month for treatment, Lamont drew attention to constituents suffering. The presence of Maureen Flemming observing the chamber today, who has now had to plan to leave Scotland for a rented apartment in Newcastle in order to access the free treatment provided in England, was particularly prominent. The Labour leader’s warning that the country was in danger of ‘exporting health refugees’ was met with loud calls from the chamber, with Salmond objecting to Labour’s fierce criticism of the Scottish prescriptions and the current Scottish Medicine’s Consortium system- both originally supported by Labour and the cancer charities. ‘Everything in this chamber is not an argument between the First Minster and I is not about manifesto- there are some things which matter more’ said Lamont.
The criticism from Lamont on this issue was hard to argue against, but Salmond said it would be unwise to change the Scottish Medicine Consortium’s current system. He highlighted that the cancer drug fund money is running out in England and the original aims the Scottish Government had in establishing free prescriptions in the first place.
Given her Westminster colleagues are currently dodging questions on party division over European membership, Ruth Davidson strangely raised the issue herself. Reminding the chamber of last year’s failure by the Scottish Government to consult legal advice on EU membership as an independent Scotland, the Conservative leader reiterated her challenge to the Yes Campaign’s assertion that independence can be ironed out in 18 months. Salmond in return listed the amount of ‘eminent experts’ consulted by his side on the matter. The Independence debate rages on, as both sides continue to out statistic- ize each other with experts.
After what has felt like a number of months of FMQs being almost exclusively focused on the independence debate, opposition members turned their attention to other issues of importance to Scotland.
Johann Lamont tackled the First Minister on the issue of waiting lists, and highlighted the case of one of her constituents who had been left on a trolley at for over 8 hours. The Labour leader has often been at her strongest when presenting individual cases, and using them to reflect wider problems. Most notably over the issue of blankets in hospitals.
The First Minster pivoted to the larger questions of the NHS, arguing that people were more satisfied with the service than ever before, while at the same time funding was at its tightest in a generation. In response Lamont widened out the issue from her constituent, highlighting figures from NHS Glasgow which showed that the number of people waiting in A&E for over four hours had trebled from 10,100 to 31,700.
In a weaker performance than normal, the First Minister concentrated on the record of Labour in Wales, and the lack of commitment from the party in Scotland to secure the health budget and keep hospitals open.
While focused on health, the questioning from Lamont was really about the performance of Nicola Sturgeon in her previous role as Cabinet Secretary for Health, and her anticipated future appointment as leader of the SNP.
Ruth Davidson questioned Salmond on the issue of life sentences following a high profile case this week of a convicted murderer who was released early, and had used European legislation to allow him to apply for parole after 30 years of imprisonment. The First Minister responded that Ministers should not be able to intervene in legal matters such as sentencing, but that he would be open to hearing suggestions from the Conservative leader.
While some barbs were traded between the leaders, this was a FMQs grounded in the day to day issues facing people in Scotland.
Welcome back to FMQs after a quiet couple of Easter weeks off. The death of Baroness Thatcher from a stroke last week has dominated the news, as the late Prime Minister’s life and work has been fiercely reviewed and debated. The First Minister was amongst the many politicians and dignitaries who attended the funeral yesterday. It is not surprising therefore, that Scottish Labour leader Johann Lamont opened with a question for Salmond about Margaret Thatcher’s legacy, and whether all young adults are in this day and age, guaranteed and motivated into education, training or work. Salmond demonstrated he hasn’t lost his talent for avoiding answering questions, and rebuked the Lamont’s line of questioning with what has been achieved by the Scottish Government for the good of Scottish young people. Unemployment figures recently announced clarify Salmond’s point- for the first time in three years, Scottish unemployment has dipped below 200, 000, and the unemployment rate is 0.6% lower than the UK average. Lamont today voiced her doubts over the official figures, citing evidence that 17,000 school leavers without work or training seem to be have been left off. She also argued that 10,000 of those who had already found work had been labelled as apprentices to make the figures more appealing.
Salmond warned that his opposition parties should take heed of the ‘lesson learnt’ from the Thatcher years- that parties which share power with the Conservatives will share the same electoral fate. The First Minister said the same will happen for the parties supporting the Better Together campaign.
The Scottish Conservative’s Ruth Davidson highlighted the unfulfilled promises of the Government to end the policy of automatic early release in its 2007 and 2011 manifestos. Davidson argued that the recent death of Robert Brown in Motherwell could have been avoided if the SNP had scrapped this scheme. In May last year Brown was stabbed to death by Sean McLaughlin, who had more than 50 convictions and been released as part of the controversial early release scheme. Salmond answered that he still intended to scrap the scheme, but also criticised Davidson for her ‘factually wrong question.’
Ken Clarke MP addressed a small number of business leaders today in Edinburgh. As former Chancellor of the Exchequer, most people were interested in his take on the Budget, however, he remained on-message and supportive of Osborne throughout. He said that Osborne had to tackle some of the most difficult economic conditions the UK had ever faced and was right to remain focused on debt reduction. He said the Chancellor was steering a good and steady course and there was a continued need to modernise the public sector.
All the measures, he claimed, were pro-growth. Clarke cited the lowering of corporation tax to one of the lowest in the G20; reductions to employers’ NI reductions; and help to secure mortgages to help house builders as particularly positive measures.
Clarke also used the opportunity to highlight his trade role and said that he was visiting Aberdeen to see what expertise there was in the oil and gas industry, which would be of interest to the Brazilian market. He also cited his activity in supporting the EU in its trade negotiations with Japan, USA and India.
He made a number of comments about banking – funding for lending was important though not enough had been done for businesses by the banks. Small business lending was still a great problem. When questioned about the European Parliament vote on restricting bankers’ bonuses, he said that the MEPs were just reacting to public opinion and bonuses should be linked to long term performance of the banks. He added that bankers’ bonuses should be comparable to other industry sectors.
Clarke was questioned as to why beer duty had been reduced, but not whisky. He said that the beer drop was due to concerns about the licensed trade. Brewing had a more compelling argument than whisky. He had lowered duty on whisky when he was Chancellor to help the whisky export market – that was no longer a problem.
It has been another week of debate between the opposing sides of the Independence Question. The bill to lower the voting age to 16 in the 2014 referendum was announced in Holyrood this week and, minutes before the MSPs filed in to the chamber today, Westminster’s Defence Secretary Philip Hammond said that independence would leave Scotland ‘militarily weaker.’ A member of the First Minister’s council of economic advisers recently said that Scotland should be ready to adopt an independent currency if it wanted to gain the ‘fiscal freedom’ promised as a major advantage of independence. Professor Kay also warned that the chance of an independent Scotland inheriting any of the UK’s annual £2.6 billion annual EU rebate would be unlikely. Scottish Labour leader Johann Lamont raised concerns that the First Minister was concealing his ‘Plan B’ of a new currency from the Scottish public. When asked whether he had had any conversations about the fate of Scottish currency, Salmond responded that many had taken place on the issue, adding that financially Scotland would do a great deal better then ‘the disaster emanating from Westminster’. Lamont’s further attempts to question the First Minister on whether it would be possible to sever the ‘strings imposed from London’ and keep the pound were shouted down by SNP backbenchers- provoking SNP’s Finance Secretary to double up with laughter.
It also appeared that controversy over last week’s leaked cabinet paper is refusing to die down- Salmond fielding questions from both Lamont and Davidson over discrepancies with oil predictions. Lamont asked why a paper meant only for cabinet members questioned the future of north sea oil and gas, whilst the government press release boasted of an “oil boom”. Salmond argued that the SNP’s oil and gas bulletin was the most up-to- date. Davidson wanted to know why the First Minister has chosen to ignore the ‘more independence, more cautious estimate.’ Davidson dismissed the government’s report as a ‘fantasy’; using the ‘average of a few cherry picked case studies and ignoring the unchallenged independent figures’. Two weeks into this Scottish oil and gas prediction stalemate, it is unlikely either side will admit to the accuracy of the other’s figures. Whilst the OBR’s prediction track- record is not particularly strong, it could also prove shameful if the First Minister, and former energy economist, was proved wrong.